SERVICE AS A SYSTEM - Principles of service marketing management

The types of relationships a service business has with its customers (and the kinds of misbehaviors that will be encountered during service delivery) depend to a great extent on the level of contact customers have with the firm. Whether a service is high, medium, or low contact becomes a major factor in defining the total service system, which includes the service operations system (where inputs are processed and the elements of the service product are created), the service delivery system (where final "assembly" of these elements takes place and the product is delivered to the customer), and the service marketing system (which embraces all points of contact with customers, including advertising, billing, and market research)

Parts of this system are visible (or otherwise apparent) to customers; other parts are hidden in what is sometimes referred to as the technical core, and the customer may not even know of their existence. Some writers use the terms "front office" and "back office" in referring to the visible and invisible parts of the operation.

Others talk about "front stage" and "backstage," using the analogy of theater to dramatize the notion that service is a performance. We like this analogy sometimes referred to as "dra maturgy" and will be using it throughout the book. The extent to which theatrical elements exist depends largely on the nature of the service process.

Table summarizes the drama implications for the four categories of service processes identified in Chapter.

service operations system: that part of the total service system where inputs are processed and the elements of the service product are created.

service delivery system: that part of the total service system where final “assembly" of the elements takes place and the product is delivered to the customer; it includes the visible elements of the service operation.

service marketing system: that part of the total service system where the firm has any form of contact with its customers, from advertising to billing; itincludes contacts made at the point of delivery.

front stage: those aspects of service operations and delivery that are visible or otherwise apparent to customers.

backstage (or technical core): those aspects of service operations that are hidden from customers


Service process

Service Operations System

Like a play in a theater, the visible components of service operations can be divided into those relating to the actors (or service personnel) and those relating to the stage set (or physical facilities, equipment, and other tangibles). What goes on backstage is of little interest to customers. Like any audience, they evaluate the production on those elements they actually experience during service delivery and on the perceived service outcome.

Naturally, if the backstage personnel and systems (e.g., billing, ordering, account keeping) fail to perform their support tasks properly in ways that affect the quality of front stage activities, customers will notice. For instance, restaurant patrons will be disappointed if they order fish from the menu but are told it is unavailable or find that their food is overcooked.

Other examples of backstage failures include receiving an incorrect hotel bill due to a keying error, not receiving course grades because of a computer failure in the college registrar's office, or being delayed on a flight because the aircraft has been taken out of service for engine repairs.

The proportion of the overall service operation that is visible to customers varies according to the level of customer contact. Since high-contact services directly involve the physical person of the customer, customers must enter the service "factory" (although there may still be many backstage activities that they don't see) or service workers and their tools must leave the backstage and come to the customers' chosen location.

Examples include roadside car repair by automobile clubs and physical fitness trainers who work with clients at their homes or offices. Medium-contact services, by contrast, require customers to be less substantially involved in service delivery. Consequently, the visible component of the service operations system is smaller.

Low-contact services usually strive to minimize customer contact with the service provider, so most of the service operations system is confined to a remotely located backstage (sometimes referred to as a technical core); front stage elements are normally limited to mail and telecommunications contacts. Think for a moment about the telephone company that you use. Do you have any idea where its exchange is located? If you have a credit card, it's likely that your transactions are processed far from where you live.

Service Delivery System in Service Marketing

Service Delivery System

Service delivery is concerned with where, "when, and how the service product is delivered to the customer. As, this subsystem embraces not only the visible elements of the service operating system buildings, equipment, and personnel but may also involve exposure to other customers.

Service providers traditionally had direct interactions with their customers. But to achieve goals ranging from cost reduction and productivity improvement to greater customer convenience, many services that don't need the customers to be physically present in the factory now seek to reduce direct contact.

Midland Bank's creation of First Direct is a prime example of this trend. As a result, the visible component of the service operations system is shrinking in many industries as electronic technology or redesigned physical flows are used to drive service delivery from higher to lower levels of contact.

Self-service delivery often offers customers greater convenience than face-to-face contact. Machines such as automated petrol pumps, ATMs, or coin-operated food and drink dispensers can be installed in numerous locations and made accessible 24 hours a day, 7 days a week. Electronic food retailing sites like and provide extensive product information and a greater selection of specialty items than most bricks and mortar outlets can offer.

Cafeteria service allows customers to see menu items before making their selection. Self-guided museum tours allow visitors to enjoy an exhibition at their own pace. Online college courses allow students to complete work at their own pace in an off-campus location.

But there are potential disadvantages to self-service delivery, too. The shift from personal service (sometimes referred to as "high touch") to self-service ("high tech") sometimes disturbs customers. So a strategy of replacing employees by machines or other self-service procedures may require an information campaign to educate customers and promote the benefits of the new approach. It also helps to design user-friendly equipment, including free telephone or e-mail access to an employee who can answer questions and solve problems.

Of course, not all self-service is installed in remote locations. Cafeterias and self-guided museum tours are examples of customers taking on tasks that would otherwise have to be assigned to service personnel. Later in this chapter, we'll discuss the role of the customer as a co producer of service in collaboration with the service provider. Using the theatrical analogy, the distinction between high-contact and low-contact services can be likened to the differences between live theater on a stage and a drama created for television.

That's because customers of low-contact services normally never see the "factory" where the work is performed; at most, they will talk with a service provider (or problem solver) by telephone. Without buildings and furnishings or even the appearance of employees to provide tangible clues, customers must make judgments about service quality based on ease of telephone access, followed by the voice and responsiveness of a telephone-based customer service representative.

When service is delivered through impersonal electronic channels, such as self-service machines, automated telephone calls to a central computer, or via the customer's own computer, there is very little traditional "theater" left to the performance. Some firms compensate for this by giving their machines names, playing recorded music, or installing moving color graphics on video screens, adding sounds, and creating computer-based interactive capabilities to give the experience a more human feeling.

Another option is to design a retail Web site to resemble a display in a store window. Some virtual companies now offer real-time, interactive e-mail communications between shoppers and customer service personnel. Consider, a provider of electronic gift certificates that can be spent online at more than 60 stores. If a customer logs onto the site and accesses the "Live Help" link at the top of the home page, there is an immediate response similar to the one Quoted below:

A Customer Care Representative will be with you momentarily! Please feel free to continue browsing below.

JasonMa has arrived to help you!
JasonMa says, "Thank you for accessing Live Chat. My name isfason.
May I please have your e-mail address so I can better assist you?"

Responsibility for designing and managing service delivery systems has traditionally fallen to operations managers. But marketing needs to be involved, too, because

What Options Do You Use for Delivery of Bank Services?

Not everyone is comfortable with the trend toward low-contact services, which is why some firms give their customers a choice. For instance, many retail banks now offer an array of service delivery options. Consider this spectrum of alternatives. Which options do you currently use at your bank? Which would you like to use in the future? And which are currently available?

  1. Visit the bank in person and conduct transactions with a bank clerk.
  2. Use postal service to send deposits or request new checkbooks.
  3. Use an ATM.
  4. Conduct transactions by telephone with a customer service representative.
  5. Use the keys on a telephone to interact with the bank in response to voice commands (or a telephone screen display).
  6. Conduct home banking through your own computer, using a modem and special software.
  7. Conduct transactions by computer through the World Wide Web.
  8. Complete banking transactions by mobile phone or PDA (personal digital assistant).

In each instance, what factors explain your preference? Do they relate to the type of transactions you need to conduct or a situational element like the weather or time of day? Are you influenced by your feelings of liking (or disliking) human contact in a banking context? Or is there some other explanation? What advice would you give to your bank for how to serve you better understanding customer needs and concerns is important to ensure that the delivery system works well.

The Dramaturgy of Service Delivery

As we've pointed out earlier, the theater is a good metaphor for services because service delivery consists of a series of events that customers experience as a performance. It's a particularly useful approach for high-contact service providers (e.g., physicians, educators, restaurants, and hotels) and for businesses that serve many people simultaneously rather than providing individualized service (e.g., professional sports, hospitals, and entertainment). the relative importance of theatrical dimensions for different types of service businesses. As you can see, watch repair services have very few front stage theatrical components compared to services like airlines and spectator sports.

Service facilities contain the stage on which the drama unfolds. Sometimes the setting changes from one act to another (e.g., when airline passengers move from the entrance to the terminal to the check-in stations and then on to the boarding lounge and finally step inside the aircraft). The stage may have minimal "props," as in a typical post office, or elaborate scenery, as in some modern resort hotels. Many service dramas are tightly scripted (as in the way that service is delivered in a formal restaurant setting), while others are improvisational in nature (like teaching a university class).

Some services are more ritualized than others. In highly structured environments like dental services, "blocking" may define how the actors (in this case, receptionists, dental hygienists, technicians, and dentists) should move relative to the stage (the dentist's office), items of scenery (furniture and equipment), and other actors.

Not all service providers require customers to attend performances at the company's "theater." In many instances, the customer's own facilities provide the stage where the service employees perform with their props. For example, outside accountants are often hired to provide specialized services at a client's site.

(While this may be convenient for customers, it isn't always very appealing for the "visiting accountants," who sometimes find themselves housed in rat-infested basements or inventorying frozen food for hours in a cold storage locker)! Telecommunication linkages offer an alternative performance environment, allowing customers to be involved in the drama from a remote location a delivery option long awaited by those traveling accountants, who would probably much prefer to work for their clients from the comfort of their own offices via modems and computers.

Dramaturgy of Service Delivery

Front stage personnel are members of a cast, playing roles as actors in a drama, and supported by a backstage production team. In some instances, they are expected to wear special costumes when on stage (like the protective clothing traditionally white worn by dental professionals, the fanciful uniforms often worn by hotel doormen, or the more basic brown ones worn by UPS drivers) .When service employees wear distinctive apparel, they stand out from personnel at other firms.

In this respect, uniform designs can be seen as a form of packaging that provides physical evidence of brand identity. In many service companies, the choice of uniform design and colors is carefully integrated with other corporate design elements. Many front stage employees must conform to both a dress code and grooming standards (e.g., Disney's rule that employees can't wear beards).

Depending on the nature of their work, employees may be required to learn and repeat specific lines ranging from announcements in several languages to a singsong sales spiel (just think of the last telemarketer who called you!) to a parting salutation of "Have a nice day!” Just like the theater, companies often use scripting to define actors' behavior as well as their lines. Eye contact, smiles, and handshakes may be required in addition to a spoken greeting.

McDonald's has an extensive handbook that prescribes employee behavior worldwide—even down to the width of the smile, according to some who've worked in the shadow of the golden arches. Other rules of conduct may include bans on smoking, eating and drinking, or gum chewing while on duty.

Role and Script Theories

Role and script theories offer some interesting insights for service providers. If we view service delivery as a theatrical experience, then both employees and customers act out their parts in the performance according to predetermined roles. a combination of social cues that guides behavior in a specific setting or context

Roles Grove and Fisk define a role as "a set of behavior patterns learned through experience and communication, to be performed by an individual in a certain social interaction in order to attain maximum effectiveness in goal accomplishment." Roles have also been defined as combinations of social cues, or expectations of society, that guide behavior in a specific setting or context. In service encounters, employees and customers each have roles to play.

The satisfaction of both parties depends on role congruence, or the extent to which each person acts out his or her prescribed role during a service encounter. Employees must perform their roles to customer expectations or risk dissatisfying or losing customers all together. And customers, too, must "play by the rules," or they risk causing problems for the firm, its employees, and even other customers. The extent to which both customers and employees act out their prescribed roles during a service encounter.

Scripts are sequences of behavior that both employees and customers are expected to learn and follow during service delivery. Scripts are learned through experience, education, and communication with others. Much like a movie script, a service script provides detailed actions that customers and employees are expected to perform. The more experience a customer has with a service company, the more familiar the script becomes.

Any deviations from this known script may frustrate both customers and employees and can lead to high levels of dissatisfaction. If a company decides to change a service script (e.g., by using technology to turn a high-contact service into a low-contact one), service personnel and customers should be educated about the new script and the benefits it provides.

Some scripts are highly structured and allow service employees to move through their duties quickly and efficiently (e.g., flight attendants' scripts for economy class).This approach helps to overcome two of the inherent challenges facing service firms how to reduce variability and ensure uniform quality. The risk is that frequent repetition may lead to mindless service delivery that ignores customers' needs.

Not all services involve tightly scripted performances. For providers of highly customized Services like doctors, educators, hair stylists, or consultants the service script is flexible and may vary by situation and by customer. When customers are new to a service, they may not know what to expect and may be fearful of behaving incorrectly. Organizations should be ready to educate new customers about their roles in service delivery, since inappropriate behaviors can disrupt service delivery and make customers feel embarrassed and uncomfortable.

A well-planned script should provide a full description of the service encounter and can help identify potential or existing problems in a specific service process. scripts: learned sequences of behaviors obtained through personal experience or communications with others.

sequences of behaviors obtained through personal experiencesequences of behaviors obtained through personal experience

shows a script for teeth cleaning and a simple dental examination, involving three players—the patient, the receptionist, and the dental hygienist. Each has a specific role to play. In this instance, the script is driven primarily by the need to execute a technical task both proficiently and safely (note the mask and gloves). The core service of examining and cleaning teeth can only be accomplished satisfactorily if the patient cooperates in an experience that is at best neutral and at worst uncomfortable or even painful.

Several script elements refer to information flows. Confirming appointments avoids delays for customers and ensures effective use of dental professionals' time. Obtaining patient histories and documenting analysis and treatment are vital for maintaining complete dental records and also for accurate billing. Payment on receipt of treatment improves cash flow and avoids the problem of bad debts. Adding greetings, statements of thanks, and good-byes displays friendly good manners and helps to humanize what most people see as a slightly unpleasant experience.

By examining existing scripts, service managers may discover ways to modify the nature of customer and employee roles to improve service delivery, increase productivity, and enhance the nature of the customer's experience. As service delivery procedures evolve in response to new technology or other factors, revised scripts may need to be developed.

Service Marketing System

In addition to the service delivery system described above, other elements also contribute to the customer's overall view of a service business. These include communication efforts by the advertising and sales departments, telephone calls and letters from service personnel, billings from the accounting department, and random exposures to service personnel and facilities, news stories and editorials in the mass media, word-of-mouth comments from current or former customers, and even participation in market research studies.

Collectively, the components just cited plus those in the service delivery system add up to what we call the service marketing system. This represents all the different ways the customer may encounter or learn about the organization in question. Because services are experiential, each of these elements offers clues about the nature and quality of the service product. Inconsistency between different elements may weaken the organization's credibility in the customers' eyes. Depicts the service marketing system for a high-contact service like a hotel, dental office, or full-service restaurant.

Service Marketing SystemService operations system

As you know from your own experience, the scope and structure of the service marketing system often vary sharply from one type of organization to another. How things change when we are dealing with a low-contact service, such as a credit card account. The significance of this approach to conceptualizing service creation and delivery is that it represents the customer's view, looking at the service business from the outside, as opposed to an internally focused operations perspective.

Physical Evidence

Many service performances are hard to evaluate. As a result, customers often look for tangible clues about the nature of the service. For instance, what impression is created in your mind if you see a damaged vehicle belonging to an express delivery service broken down by the side of the road? Or observe a poorly groomed flight attendant traveling to (or from) the airport wearing a frayed and dirty uniform? Or visit a friend in a hospital where the grounds and buildings are beautifully maintained, the interior decor cheerful rather than institutional, and the friendly staff wearing smart, spotlessly clean uniforms?

Physical evidence provides clues about service quality, and in some cases it will strongly influence how customers (especially inexperienced ones) evaluate the service. Thus managers need to think carefully about the nature of the physical evidence provided to customers by the service marketing system. We'll be addressing this element of the 8Ps in more depth in Chapters, but provides an initial checklist of the main tangible and communication elements to which customers might be exposed.

Of course, the number of elements that are visible will vary depending on whether service delivery involves high or low customer contact. In low-contact services, additional physical evidence may be communicated through advertising, using video footage on TV or printed illustrations in newspapers, magazines, or brochures.

service delivery involves high or low customer contact

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